14 Aug 2020
Posted in Banking
Panic buying extends to life insurance amid COVID-19 fears in Australia, finds GlobalData
‘Panic’ buying extends to life insurance products in Australia as the number of Australians concerned about COVID-19 is on the rise again. However, trust in insurance providers remains low, says GlobalData, a leading data and analytics company.
Data from GlobalData’s 2020 Global Wealth Managers Survey* shows that COVID-19 is driving demand for life insurance products among Australian high-net-worth (HNW) investors.
Survey results show that 88% of wealth managers report increased demand for life insurance products as a result of the COVID-19 pandemic – the highest proportion among the 19 countries surveyed.
Heike van den Hoevel, Senior Wealth Management Analyst at GlobalData, says: “Panic buying does not end with food. In the face of growing concerns surrounding infections, Australian HNW investors are looking for ways to care for their families.”
Data from GlobalData’s COVID-19 Tracker Survey** shows that 83% of Australians were ‘quite concerned’ or ‘extremely concerned’ about the outbreak of COVID-19, as of 5 August. Another 12.1% were ‘slightly concerned’, leaving a mere 5% who voiced no concerns.
In addition, 61.5% of Australian believed that the COVID-19 situation will get ‘a bit’ or ‘a lot worse’ over the next month. This compares to only 28.7%, who expected the situation to deteriorate at the beginning of May.
van den Hoevel explains: “This negative sentiment will continue to support the demand for life insurance products. Roughly half of the wealth managers GlobalData surveyed expect demand to continue to rise over the coming year while virtually none expected demand to fall. However, the lack of trust in insurance providers continues to have a significant effect on the provider selection. The crisis has been a double-edged sword – COVID-19 is driving demand but has also had a negative impact on the insurance providers’ image.”
According to GlobalData’s proprietary data, 96% of wealth managers agree that customers have lost confidence in the life insurance industry as a result of the COVID-19 pandemic.
van den Hoevel concludes: “This is a worrying statistic – the reputation of insurers has taken a battering amidst COVID-19 and HNW investors will be more likely to buy insurance products via a third party they already trust and have an established reputation with. This means now is clearly the time for wealth managers to review their life insurance proposition.”
2020 Global Wealth Managers Survey*: In Q2 2020 GlobalData undertook 16th annual survey of wealth management companies from 19 countries – Australia, Belgium, Canada, China, Denmark, France, Germany, Hong Kong, India, Indonesia, Norway, Singapore, South Africa, Sweden, Switzerland, Taiwan, the UAE, the UK, the US – to gather their views on a variety of industry issues as well as their HNW clients’ attitudes and behaviors. A total of 382 wealth management executives in a variety of senior roles were interviewed by telephone to complete the survey. In Australia, 20 wealth managers were surveyed.
COVID-19 Tracker Survey**: The 10-week tracker online survey (from 25 March to 31 May 2020) was carried out in 11 countries – Australia, Brazil, China, Germany, India, South Africa, Sweden, the UAE, the UK and the US. Survey respondents are aged 16+.